The retail rampage

It’s always been a source of somewhat-gainful employment – especially for young Australians fresh out of school in search of their first proper part-time job. But the Australian retail sector is facing some serious challenges, which threaten to impact on the industry’s employees.

Statistics from last year indicate that retail workers are certainly experiencing a squeeze, with more than 35,000 jobs disappearing in the quarter ending in August 2013.

To an extent, this is unsurprising; the continual rise of online retailers like eBay, ASOS and The Iconic means that bricks and mortar stores – requiring customer service and on-the-ground employees – are suffering. Online stores offer a number of benefits to consumers; chief among them are convenience, greater choice and potentially lower prices.

Online stores now account for about 6.5% of our total retail spending – and this proportion seems likely to increase in coming years. Despite this trend, most people, if asked, would surely advocate support for retail employees. However, this attitude isn’t necessarily front-of-mind when a coat selling for $450 in-store is available for $250 online.

The trend against the traditional retail model is also evidenced by news that David Jones and Myer – two of the country’s retail cornerstones – could be merging in the near future. Collectively, the brands employ more than 20,000 people. Myer approached David Jones last October proposing a union. The board of David Jones declined that offer, but Myer has since come back with new terms.

The potential for a merger has provoked strong media coverage, though commentators have thus far focused primarily on the implications for investors and customers. It’s arguably employees who will be most directly impacted, though. Inevitably, if the two retailers do become one, a considerable proportion of workers for the two brands could lose their jobs.

Although mergers and online competition paint a fairly bleak picture, the news isn’t entirely bad for retail workers. Part of the threat to institutions like Myer and David Jones has been an armada of overseas chains opening stores in Australia. In recent months Zara and Topshop have both forged presences locally, with Marks & Spencer and H&M are also expected to open stores in Australia in the coming months.

This raft of new retailers will, of course, need staff – many of whom will probably be ex-employees of failed or reduced retailers.

In another encouraging piece of news, online retailers like eBay are also beginning to explore a new venture called “click and collect”, which involves consumers buying a product online and then picking it up in a physical store. This has been described as a “big advantage” for retailers.

Even some statistics contradict assumptions that the retail sector is in the doldrums. The industry’s performance improved markedly towards the end of last year – including over the Christmas period. The rise in turnover year-on-year was 5.7 per cent – the biggest yearly growth that has been measured since November 2009. The overall state of affairs, then, seems mixed. Without doubt, the industry is experiencing a squeeze at present, having struggled to adapt to a new environment where online sales are becoming increasingly dominant. Positively, though, the sector is being propped up by new arrivals and greater consumer confidence. Retail workers aren’t exactly safe, but they shouldn’t be shaking in their brand name ankle boots, either.